Negotiators are heading towards the annual UN climate conference with a tremendous workload to overcome, after an emergency effort in Bangkok to flesh out the Paris Agreement implementation guidelines closed on Sunday 9 September with “limited” and “uneven” progress.

The additional talks in the Thai capital were scheduled after mid-year negotiations under the UN Framework Convention on Climate Change (UNFCCC) in Bonn, Germany, failed to yield sufficient results on the Paris “rulebook” to be considered on track for the year-end deadline. (See Bridges Weekly, 17 May 2018)

Under the landmark climate agreement, reached in Paris in December 2015, all parties have committed to climate actions to limit the collective rise in global average temperatures to well below two degrees Celsius relative to pre-industrial levels, while making their best efforts to hold the increase to 1.5 degrees Celsius. (See BioRes Paris Update, 13 December 2015)

The details for implementing the Paris accord were left for negotiation at future talks, with the deadline set for this year’s 24th Conference of the Parties (COP), taking place in Katowice, Poland, from 2-14 December.

Negotiators seek faster, balanced progress

In Bangkok, officials met in various formal and informal settings under the Ad Hoc Working Group on the Paris Agreement (APA), the Subsidiary Body for Scientific and Technological Advice (SBSTA), and the Subsidiary Body on Implementation (SBI). The three bodies are in charge of developing different aspects of the Paris Agreement Work Programme.

The talks were supported by “tools” which the APA co-chairs had prepared in August to help parties navigate the hundreds of pages of proposals and streamline them into a draft negotiating text. Negotiators went through several readings of the draft texts across the various elements but were unable to deliver a draft negotiating text, leaving Bangkok with a 307-page compilation document instead.

Parties have now tasked the chairs of the APA, SBSTA, and SBI to prepare a joint “reflections note” based on the progress made in Bangkok. Due by mid-October, the note is meant to identify ways forward, “including textual proposals,” to help parties conclude the Paris rulebook. This shall be done in a “balanced and coordinated” manner, echoing parties’ concerns about the uneven progress across elements to date.

“In Bangkok, there has been uneven progress on the elements of the climate change regime that countries are working towards,” said Patricia Espinosa, Executive Secretary of UN Climate Change, adding that achieving balance is important since “all parts of the regime need to function together in an inter-connected manner.”

Climate finance questions loom

Poorer countries were especially frustrated by the lack of progress on reaching clarity and predictability on climate finance now and in the longer term. These countries rely heavily on external support to meet their climate targets and are asking donor countries to report on their pledges every two years.

Many developed countries, however, say that they want more flexibility and less oversight on their financial contributions, and argue that their budgetary cycles make it difficult to meet the biennial reporting request.

The Bangkok talks were also overshadowed by the growing uncertainty over how countries will meet the collective commitment of channelling US$100 billion of climate finance annually by 2020 to developing countries.

The Green Climate Fund, which is meant to be the main vehicle for allocating climate finance, urgently needs to top up its dwindling balance, a task rendered more difficult by US President Donald Trump’s decision not to deliver the US$2 billion that was pledged under his predecessor, Barack Obama.

The fund’s governance is also in dire need of reform after a July board meeting collapsed, leaving 11 funding bids worth nearly US$1 billion pending. The Green Climate Fund is due to hold another board meeting from 17-20 October in Manama, Bahrain. (See Bridges Weekly, 12 July 2018)

Political divisions reappear

The Bangkok session was also bogged down by the renewal of previous disagreements over countries’ responsibilities in the fight against climate change – an issue that had already re-emerged during the Bonn negotiating meetings earlier this year.

The Paris Agreement was hailed for overcoming the long-standing separation of responsibilities between countries with varying developmental levels, getting all parties to commit to undertaking emissions cuts. However, some countries are now trying to include divisions of responsibility in the climate accord’s operating guidelines.

Delegations disagreed particularly over the timeframes for communicating new nationally determined contributions (NDCs), which are countries’ individual climate action plans. These NDCs form the cornerstone of the climate accord. Countries are divided over whether all parties should be required to adhere to common timeframes or whether developing countries should be accorded some flexibility.

What type of information parties should include in future NDCs and how countries report progress on meeting their NDCs are also contentious points, with some developing countries asking for more leniency due to their limited resources. Countries are due to have a first “global stocktake” in 2023 to report on their efforts in meeting their post-2020 climate goals and in crafting more ambitious NDCs, and are meant to do a trial review this year – known in UN jargon as a “facilitative dialogue.”

Carbon market discussions make headway

The Bangkok meet made good progress on fleshing out the details for carbon market approaches under Article 6 of the Paris Agreement.

Article 6 contains general provisions on the international transfer of mitigation outcomes (Article 6.2), a mechanism that will “contribute to the mitigation of greenhouse gas emissions and support sustainable development” (Article 6.8), and non-market approaches (6.8). However, more detailed guidelines are needed to help parties achieve emissions reductions through cooperation.

The possibility to fulfil national climate pledges through cooperative market approaches has sparked interest from countries and regions who are looking to link carbon pricing schemes to trade permits. Advocates say this could help cut emissions at a lower cost, while also addressing concerns over potential losses in economic competitiveness.

In Bangkok, parties produced new versions of the draft texts for all three elements of Article 6. The texts are now better organised, more structured, and offer clearer linkages between options.

On carbon markets “we’re better off now than going in,” said Henrik Hallgrim Eriksen, Norway’s chief climate negotiator, in comments to Bloomberg. Eriksen added that “there are many different options and possibilities” and that Bangkok was “not a meeting where things have been resolved.”

The new draft texts on Article 6 separate elements into two annexes. Annex I contains those elements which form the policy guidance for adoption at COP24, while Annex II includes the more technical elements that will be forwarded to a work programme for 2019.

Despite this progress, parties remain divided on several critical issues, including the creation of accounting standards for reporting transferred mitigation outcomes; the calculation of baselines and performance benchmarks for awarding emissions reduction units; the registering, issuance, and tracking of credits under the new mechanism; and the governance modalities.

Parties also need to reach consensus on whether and how to transition units, methodologies, and accreditation standards from the current market mechanisms under the Kyoto Protocol, which is the Paris Agreement’s predecessor. Some parties argue for their continuity to preserve private sector trust, while others warn that transitioning existing units could undermine mitigation commitments under the Paris accord.

The UN Climate Change Secretariat has recently defended the Kyoto Protocol’s Clean Development mechanism (CDM), which it claims has driven investments worth over US$300 billion while cutting two billion tonnes of emissions. The CDM had previously come under fire from some quarters, with some experts arguing that the emissions cuts were not additional but would have taken place anyway.

Response measures talks raise trade issues

Negotiators also resumed discussions on the response measures forum, which will start serving the Paris Agreement in December 2018. The term “response measures” refers to actions that countries take to mitigate emissions, which in some cases may have economic, environmental, or social effects on other countries.

The continuation of the response measures forum was a critical element for securing the climate accord in 2015. The move to self-determined mitigation targets and measures has increased countries’ concerns about the cross-border impacts of climate measures.

The emphasis of the response measures discussion has evolved significantly from the original compensation argument, driven by developing countries, particularly major oil-exporting countries. These countries were concerned about the negative impacts of developed countries’ climate policies on the demand for and supply of their goods and services. The discussion has now shifted towards a focus on the economic and social impacts of the low-carbon transition.

Old divisions and challenges have nevertheless resurfaced in negotiations on how to structure the forum and its work going forward. Delegates added multiple options to an informal document from the May talks. The nine-page draft decision now contains an even wider range of options for the forum’s modalities, work programme, and functions, as well as for the decision’s preamble.

Several developing country groups and parties are arguing for expanding the scope of the forum, currently focused on economic diversification and just transition of the workforce, to include, among other things, impacts on international trade and investment, as well as value chain integration.

The consideration of trade aspects in the climate regime has traditionally been a contentious issue. While some parties have previously sought to discuss trade in the response measures forum, this has been a side topic given the reluctance of several parties to engage.

Trade considerations in the climate regime have therefore mostly focused on the reiteration of Article 3.5 of the UN Framework Convention on Climate Change, which stresses that “measures taken to combat climate change, including unilateral ones, should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade.” Some parties are now seeking to anchor this provision in the response measures forum by including it explicitly in the preamble of the forum’s decision.

Parties also disagree on the governance of the forum, with one proposal seeking to establish the forum as a permanent executive committee with a negotiating and a technical arm.

Another sticking point is the attempt by some parties to give the forum a more action-oriented mandate, which would see the forum recommend specific actions for dealing with the impacts of response measures. Previous efforts to steer the forum towards such a function have been unsuccessful.

Global momentum for climate action

Avoiding catastrophic climate change beyond what the world is already witnessing today will require a significant step change from politicians, businesses, and citizens around the world. In a speech on climate change delivered on Monday 10 September, UN Secretary-General António Guterres warned that “the ambition of our action is nowhere near where it needs to be” to avoid “runaway climate change.”

Citing a UN Environment report that found that the Paris pledges would deliver only one-third of the emissions cuts needed to reach the two degrees Celsius goal, Guterres called for a shift away from dirty fossil fuels towards clean energy. He also highlighted the importance of sustainable food production, greater resource efficiency, smarter infrastructure, and an end to deforestation, citing the benefits of such moves for the climate, the economy, and public health.

Guterres asked politicians to show leadership and use every opportunity in the coming months “to resolve the sticking points” to make COP24 a success.

The run-up to COP24 will be marked by a series of international meetings where the world’s leaders will have the chance to mobilise the necessary political will to conclude a successful Paris rulebook. This includes the Global Climate Action Summit, hosted by California’s governor Jerry Brown in mid-September, followed by the UN General Assembly, New York Climate Week, and the G7 environment ministerial later this month, as well as the October pre-COP.

The pre-COP is an informal ministerial meeting that regularly takes place as part of the COP preparations to lay the political groundwork.

Climate action discussions may also feature at the G20 leaders’ summit, set for 30 November-1 December in Buenos Aires, Argentina. Separately, the inaugural New Economy Forum, being held in Singapore from 6-7 November and hosted by climate action advocate, philanthropist, and former New York City mayor Michael Bloomberg, has listed climate change as one of its main topics and is expected to have a high-level slate of public and private sector attendees.